- Gold is poised to retake a crucial support level
- Bitcoin would great significantly benefit from the next bullish move of gold
- Several fundamentals trends could push gold and Bitcoin higher
Bitcoin News Today – Bitcoin has not experienced any major price movement over the past couple of days after plunging from the weekly high of $10,900. Interestingly, the negative news about BitMEX only had very little impact on the price of the digital currency. Meanwhile, gold is poised to retake a crucial support mark on the mid-term scale, and this can boost the price of Bitcoin significantly.
Bitcoin Might Surge Higher with Gold Poised to Retake Crucial Support Level
A prominent digital currency trader recently shared a chart showing that the price of gold is poised to retake a key support level – the level that acted as support for three different occasions in the past two months. If gold retakes that level, chances are the price of Bitcoin might benefit from it, as both assets have been correlated over the past few months.
The crypto trader believes that gold returning to the aforementioned support at $1,900 would trigger an uptrend to $2k. The last time gold traded over $2k, the price of Bitcoin surged over $11k and close to $12k. Bitcoin has put up a pretty strong show this week, as it did not post any major correction despite the series of negative news in the industry.
Bitcoin (BTC) Price Today – BTC / USD
Fundamentals Are Favoring Bitcoin and Gold
Strengthening the positive technical trends that Bitcoin and gold have, there are some fundamental trends that could push their values higher. The co-founder of DTAP Capital and Gold Bullion International – Dan Tapiero – recently said that the structural deflation in Europe could push the price of the Bitcoin higher.
He believes that this deflation would drive real rates in the EU higher relative to other markets, hence push the value of the USD lower. As gold and Bitcoin serve as a safe-haven against plunges in the USD, this trend could push the price of these assets higher. Tapiero said:
“Massive structural deflation in Europe supports Bitcoin. Causes European Union real interest rates to geo up even as nominal rates are negative. Crushes legacy European Union banks. European Central Bank drags feet and maybe [its] hands [are] tied. Dollar falls as real rates rise faster in the European Union than in the US.”
Other fundamental trends that could boost the value of Bitcoin and gold include the commitment to continued monetary stimulus. The Chairman of the Federal Reserve – Jerome Powell – recently doubled down on commitment to 2 percent inflation. Both gold and Bitcoin stand to benefit from this, as they serve as safe-haven assets.